State comptroller says deficit is $415 million

Published December 04. 2012 12:01AM

Hartford (AP) - State Comptroller Kevin Lembo on Monday released a new state budget deficit projection of $415 million, an estimate $50 million higher than Gov. Dannel P. Malloy's budget office is predicting.

Lembo said the difference between his deficit projection for the fiscal year that ends next June and the one issued by the state Office of Policy and Management is the result of different estimates of higher education spending. Officials said much of the deficit in this year's $20 billion budget is due to higher-than-expected Medicaid costs.

Lembo also sent a letter to Malloy on Monday saying the deficit exceeds 1 percent of total general fund appropriations, a benchmark that requires the governor to submit a deficit-reduction plan to lawmakers within 30 days.

Malloy last week announced $170 million in spending cuts across state agencies and is putting together a plan to deal with the rest of the deficit. State lawmakers are expected to take up the shortfall during a special session at the end of the month.

"Projected state spending above budgeted levels and the slow pace of national economic recovery are impeding the state's ability to bring the budget into balance," Lembo said in a statement. "Economic indicators are below the levels normally observed at this stage of a recovery."

Three weeks ago, Malloy's budget director, OPM Secretary Benjamin Barnes, confirmed a $365 million deficit. He attributed it to the lackluster national and regional economies, years of deferring Connecticut's long-term liabilities such as pension costs and a fast-growing demand for public services such as Medicaid health care coverage.

"However, the governor, comptroller and it seems legislators all agree there is a current year shortfall that needs to be addressed before the end of the calendar year," Occhiogrosso said. "The deficit mitigation plan the governor will propose within the next couple of weeks will, based on the best available data at the time, bring the current year budget into balance."

Connecticut GOP chairman Jerry Labriola Jr. said the projection is the latest evidence of what he called Malloy's "gross mismanagement" of the state's finances.

"With the current fiscal year deficit at $415 million and climbing and next year's deficit projected at more than $1 billion dollars, it is clear that the economic policies of Governor Malloy have been an utter failure," Labriola said in a statement.